“Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. A summary of our risk factors is included below. Except for the below risk factors, there have been no material changes from the risk factors described in our Form 10-K.
| ● | We may not realize anticipated benefits from acquisitions, including our craft beverage and BrewDog-related transactions, and may face integration challenges and operational disruption. |
| ● | Our access to the revolving credit facility is restricted and, if we are unable to demonstrate compliance with the applicable financial covenants in the future, the restrictions may continue and the lenders may exercise remedies that could materially adversely affect our liquidity and financial condition. |
| ● | Our business is highly dependent on maintaining regulatory approvals, licenses and permits across multiple jurisdictions, and changes in cannabis, hemp or other applicable laws—including in the United States—could materially adversely affect our operations and strategy. |
| ● | Evolving international regulations, including import/export restrictions and delays, may limit our ability to expand and operate globally. |
| ● | We face significant competition across our cannabis and beverage businesses, including from illicit market participants and large, well-capitalized competitors. |
| ● | Our beverage business is subject to changing consumer preferences, reliance on third-party distributors, and strong competitive pressures that could reduce sales and margins. |
| ● | Our operations depend on key facilities, supply chains and agricultural production, which are subject to risks such as natural disasters, crop failure, supply disruption, and increases in input costs. |
| ● | Our products may be subject to recalls, contamination, product liability claims, or adverse health effects, and negative publicity may harm consumer demand and our reputation. |
| ● | We are subject to litigation, regulatory enforcement, and health, safety and environmental laws that could result in significant costs, liabilities and operational restrictions. |
| ● | Cybersecurity incidents, information technology failures, or data privacy breaches could disrupt operations, result in financial losses, and expose us to liability. |
| ● | United States regulations relating to hemp-derived CBD products, Delta-9 products, and medical cannabis products are new and rapidly evolving, and changes may not develop in the timeframe or manner most favorable to our business objectives. |
| ● | Our success depends on our ability to attract and retain key personnel, manage labor costs, and avoid workforce disruptions. |
| ● | We have a history of net losses and may not achieve or maintain profitability; Our existing and future debt agreements may contain covenant restrictions that limit our ability to operate our business and pursue beneficial transactions. |
| ● | Macroeconomic conditions, inflation, tariffs, foreign exchange fluctuations, and geopolitical instability may adversely affect our business, results of operations and financial condition. |
| ● | We face risks related to internal controls, tax and accounting matters, and may incur impairments of goodwill and other assets. |
| ● | The market price of our common stock is highly volatile, and our capital structure, including convertible securities and future equity issuances, may result in dilution or limit our strategic flexibility. |
| ● | Additional risks include limitations on protecting our intellectual property, reliance on insurance and self-insurance, costs of being a public company, governance provisions that may limit change-of-control transactions, and emerging risks such as our cryptocurrency strategy. |
Our access to borrowings under the revolving credit facility is restricted and, if we are unable to demonstrate compliance with the applicable financial covenants in the future, the restrictions may continue and the lenders may exercise remedies that could materially adversely affect our liquidity and financial condition.
Our credit facility requires us to comply with certain financial covenants. In October 2026, we entered into the Seventh Amendment, which provides that the financial covenants under the credit facility will not be tested for the fiscal quarter ended August 31, 2026, and revises certain financial covenants for subsequent periods, including the maximum consolidated leverage ratio, the minimum consolidated EBITDA and the minimum liquidity requirements. The Seventh Amendment also limits our borrowing availability under the revolving credit facility until the covenant tests are once again tested. The Seventh Amendment does not assure our compliance with the financial covenants or other obligations under the credit facility in future periods. Our ability to comply with these requirements will depend on our operating performance, cash flows, access to capital and other factors. If we fail to comply with applicable financial covenants or other obligations in a future period and are unable to obtain a waiver or amendment, the lenders may have the right, subject to the terms of the credit facility, to terminate their commitments, declare outstanding indebtedness immediately due and payable, charge default interest and exercise remedies against collateral securing the indebtedness.
Any future noncompliance could require us to repay outstanding borrowings or seek additional waivers or amendments, which may not be available on acceptable terms or at all. Any resulting repayment of indebtedness could reduce our available liquidity and adversely affect our ability to fund our operations, investments and other strategic initiatives. The exercise of remedies or acceleration of indebtedness could materially adversely affect our liquidity and financial condition and could restrict our ability to invest in our business, incur additional indebtedness, make acquisitions or pursue other strategic opportunities.
